Glossary

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GLOSSARY

A B C D E F G H I J
L M N O P Q R S T U
V W X Y Z          

 

A

Accelerator

[Aceleradora]
Startup accelerators are fixed-term, cohort-based programs that include seed investment, connections, sales, mentorship, educational components, and culminate in a public pitch event or demo day to accelerate growth for later-stage / more established companies.

Acqui-hire

[Adqui-contratación]
Acqui-hiring or Acqui-hire (from “acquiring and “hiring”) is a growth strategy where a company acquires another with the objective to recruit talent and integrate the employees of the acquired company, while the product becomes secondary reason for the transaction.

Ad Revenue

[Ingreso de publicidad]
Also known as advertising revenue, it refers to a company’s income based on selling advertising. Common for digital media or freemium platforms.

Angel Investor

[Ángel Inversionista]
A high net-worth private individual with an investment in a startup. Also known as seed investors, private investors, or angel funders.

Annual Recurring Revenue

[Ingreso Anual Recurrente]
A standardized metric which determines the amount of money expected in a given year from a contract or paid subscription service.

Artificial Intelligence (AI)

[Inteligencia Artificial]
The theory and development of computer systems able to perform tasks that normally require human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.

Average Revenue Per User

[Ingreso Promedio por Usuario]
A standardized metric which determines the average amount of money generated by a user.

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B

Balance Sheet

[Balance General]
A financial statement that displays a company’s assets, liabilitities and shareholders’ equity in monetary values. It contrasts the investments made by the enterprise, and the way those investments were financed.

Biotech

[Biotecnología]
A sector that deploys technologies reliant on chemistry, engineering, and computer science in order to create solutions pertaining to living organisms.

Blockchain

[Cadena de bloques]
A decentralized data structure that registers records/transactions/interactions (each one of these a “block”). Over time, the resulting chain of blocks both creates a publically verifiable archive of all past interactions as well as continuing to register new ones.

Bootstrapping

[Bootstrapping]
A company going from zero to income through sales with only founders’ initiative, luck, and personal savings. This does not mean the startup is necessarily (or even usually) profitable.

Break Even Point

[Punto de equilibrio]
A financial metric that shows a point in time or monetary value where revenue is equal to expenses; meaning there aren’t profits or losses.

Bridge Round

[Ronda Puente]
A financing round (often smaller than usual rounds) to tide over or top up a promising company’s capital between rounds.

Burn Rate

[Burn rate]
Money divided by time. The rate shows how fast a company is burning through its cash, and how much time it’s got until it hits US$0.

Business to Business (B2B)

[B2B]
A business model where a company sells to other businesses.

Business to Consumer (B2C)

[B2C]
A business model where a company sells directly to individuals.

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C

C-Level Executives

[Ejecutivo Nivel C]
High-ranking executive of a company in charge of making company-wide decisions. The “C” stands for “chief.” Some best-known C-level executives include the chief executive officer (CEO), chief operating officer (COO) and chief information officer (CIO).

Capitalization Table (Cap Table)

[Tabla de Capitalización]
A document that displays the equity capitalization breakdown for a company. Cap tables often include percentages, number of shares, capital contributions per individual shareholder. The calculations are made including all of a company’s equity ownership capital, including as common equity shares, preferred equity shares, warrants, and convertible equity.

Cliff

[Tabla de Capitalización]
A cliff usually applies to vesting schedules (shares given to employees over time). Cliffs can be a device for the CEO to fire employees or let them leave without giving them stock within a limited period of time (usually 1 year).

Corporate Venture Capital (CVC)

[Capital de Riesgo Corporativo]
The investment wing of a large company specialized in startups offering innovative solutions, often related to the company’s own sector.

Crowfunding

[Financiamiento colectivo]
The practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.

Customer Acquisition Cost (CAC)

[Costo de adquisición de cliente]
Customer acquisition cost is the price paid to acquire a new customer. In its simplest form, it can be calculated as follows: CAC = Total marketing campaign costs/new customers acquired in that specific period.

► Listen this concept at Contxto 101

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D

Discounted Cash Flows

[Flujos Descontados]
A valuation method where the value of a company is calculated by forecasting future revenue, expenses and profit margins, to be later discounted at an expected weighted rate of return for creditors and equity shareholders.

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E

Early Adopter

[Early adopter]
A specific type of consumer or user that usually seeks new products, and most of the times, is capable of bearing glitches and inconveniences from new technologies

Economies of Scale

[Economías de Escala]
In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.

Exit

[Salida]
A liquidity event, commonly associated to a merger, aqcuisition or initial publi offering, where the original or early shareholders are able to turn sell their shares. These shareholders can receive their payment in cash or equity.

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F

Fintech

[Tecnología Financiera]
Meaning “financail technology,” this is a branch of startup that develop alternative financial solutions, more often than not for the unbanked (those who don’t have bank accounts).

Flywheel

[Flywheel]
Succesor to the customer acquisition funnel. A dynamic system interlinking service, marketing, and sales into a virtuous cycle with the customer at its center, propelling them to be, not only consumers, but active ambassadors for the company.

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G

General Partner

[Socios generales]
A venture capital partner and the manager of the fund. GPs are in charge of fundraising, running operatings, as well as holding the ultimate investment decisions along with the LPs (Limited Partners), to which they have a fiduciary responsibility towards. A GP is what is commonly referred to as a VC (Venture Capitalist).

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H

Holding Company

[Sociedad gestora/Sociedad comercial]
Company created to buy and possess the shares of other companies, which it then controls.

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I

Incubator

[Incubadora]
Like an accelerator, but for early-stage startups still forming an MVP, product market fit, business model, etc.

Initial Public Offering (IPO)

[Oferta Publica Inicial – OPI]
A company’s launch into the stock market. Referring to the shares offered to external buyers of a previously private company’s equity on going into trade on the open market.

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M

Market Segment

[Segmento de mercado]
Activity of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers based on some type of shared characteristics

Monthly Recurring Revenue (MRR)

[Ingreso Mensual Recurrente]
A standardized metric which determines the amount of money expected in a given month from a contract or paid subscription service.

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P

Payment Gateway

[Pasarela de pagos]
Merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar.

Phishing

[Phising]
Fraudulent attempt to obtain sensitive information such as usernames, passwords and credit card details by disguising oneself as a trustworthy entity in an electronic communication.

Pre-Money

[Phising]
Valuation of a company or asset prior to an investment or financing. If an investment adds cash to a company, the company will have different valuations before and after the investment.

Profit & Loss Statement (P&L)

[Estado de resultados]
AKA Income Statement.

Purchasing power

[Poder adquisitivo]
Financial ability to buy products and services.; the value of a sum of money.

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R

Revenue

[Ingresos]
Income, especially when of a company or organization and of a substantial nature.

Runway

[Runway]
As opposed to a burn rate (available cash/operational costs), a company’s runway calculates the amount of time it has before its available cash runs out; (total capital in the bank/burn rate).

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S

Simple Agreement For Future Equity (SAFE)

[Simple Agreement For Future Equity]
An agreement signed by investors and a company through which the former are assured future equity in the latter, but without determining what the price per share will be at the time of investment. The investor then obtains these shares at another investment or liquidation event.

Small and Medium Size Enteprise (SME)

[Pequeña y Mediana Empresa (PyME)]
Small and Medium Sized Enterprise.

Startup

[Startup]
A company developing and offering a scalable and innovative solution, often intitially financed by privately and/or venture capital.

Subsidiary

[Subsidiaria]
Company controlled by a holding company.

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U

Unicorn

[Unicorn]
A privately-owned startup worth over US$1 billion.

Unit Economics

[Unit Economics]
The net income or cost of any given business model as expressed by a per unit basis of what is being sold. Also applicable to the lifetime value of a customer compared to its acquisition costs; ie. how much is this customer going to mean in terms of revenue, and how much did it cost me to acquire it?

User Persona

[User persona]
A hypothethical representation of the target market of a company on an individual basis. A user persona is the characterization of an ideal customer to which a name, demographics, interests and life description are usually added in order to represent the average customer for a product.

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V

Valuation Cap

[Cap de Valuación]
A maximum amount set to the valuation of a company on its subsequent funding round, included as a clause during SAFE investment vehicles. The cap offers current investors a safety legal platform so that the valuation in the next round won’t climb to undesirable levels for them.

Venture Capital (VC)

[Capital de Riesgo]
Investment funds that manage the money of investors who seek private equity stakes in startup and small- to medium-sized enterprises with strong growth potential.

Venture Capital Fund

[Fondo de Capital de Riesgo]
Organizations that gather and invest the capital of numerous parties often seeking obtain equity in a startup. The investing parties may be both private individuals as well as institutional investors.

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